Law firms swarmed North Bay fire victims in 2017. Now they’re heading to Maui

Soon after the 2017 North Bay wildfires and again after the 2018 Camp Fire, big out-of-town law firms flooded Sonoma, Napa and Butte counties, signing up fire victims by the thousands to take electric utility Pacific Gas & Electric to court for the damage.

Now, some of those same firms have landed on Maui to investigate and sue power supplier Hawaiian Electric Industries Inc., though an official cause has yet to be determined.

For residents of such fire-scarred towns as Paradise and Santa Rosa, lawyers’ quick descent on Maui brings up memories of suddenly omnipresent billboards, radio spots and online advertisements for representation in the wake of California fires.

And while litigation is sometimes the only way to recoup financial losses, the legal process compounded the trauma for some California victims, and seeing it repeated in a new disaster zone dredges up painful memories.

“It's really distressing and disappointing, but it's not surprising because I saw the ads and heard the radio here. They’re appealing to people who are experiencing the worst thing of their entire lives, and they're kind of taking advantage of that,” said Santa Rosa resident Beth Eurotas-Steffy, whose mother lost everything in the 2017 Tubbs Fire.

“In my mind, they're doing that to fill their pockets because they make a lot of money off these lawsuits,” she said. “The fire is still smoldering in Maui, give them some time.”

On the heels of the Tubbs Fire, Eurotas-Steffy had been hesitant to sign on with a law firm. She found the advertising “kind of slimy,” and she worried about dredging up the trauma and chaos of the fire.

Her mother had been stranded at the assisted living facility where she lived as flames burned on all sides. She made it out with only her nightgown and a walker and lost everything else.

Still, as Eurotas-Steffy juggled finding new housing and care for her mother, who also was going through serious health issues, hiring a lawyer seemed like the best shot at getting compensation for the family’s losses.

She hired Watts Guerra LLP, which opened a Santa Rosa office but is originally based in Texas, on her mother’s behalf in 2018.

Watts Guerra, led by famed and controversial litigator Mikal Watts, and San Diego-based Singleton Schreiber are two of the locally familiar firms that have set up shop on Maui, investigating liability and enlisting clients in Lahaina, the town devastated by the deadliest wildfire in recent U.S. history.

Officials have confirmed at least 110 deaths so far from the fire and 2,200 buildings burned to the ground. The death toll is expected to rise as officials continue to search the wreckage in Lahaina.

Singleton Schreiber partner Gerald Singleton said attorneys are a necessary response to disasters. He argued that loose regulation in the United States makes corporate-caused catastrophes frequent, and thin safety nets mean the people who are affected aren’t going to be made whole without litigation.

“I look at it as this is the way our system is set up,” he said. “In America, you’re on your own. You don’t get any protection. Attorneys are people’s remedy.”

Insurance is the first line of defense, but “certainly the availability of civil litigation for redress is an important part of our system for helping people be compensated,” said Dave Jones, former California Insurance Commissioner and current director the Climate Risk Initiative at UC Berkeley’s Center for Law, Energy and the Environment.

“If (people) have insurance, and assuming that their insurance covers the full value of their property, which is a big if, then individuals, families and businesses usually can prevail although it takes some time and effort,” he said.

“For people who are uninsured or under-insured, the recourse those folks have is to bring a lawsuit against any private or public individual or entity who contributed to their loss of life or property.”

According to Singleton, firms experienced in large-scale wildfire litigation like his are better equipped to “take this on and negotiate” and secure fair settlements for victims, he said.

But the process has felt less than fair to many fire victims.

“I just know that people are going to be really disappointed, that’s all,” said Therese Rubiolo, a Camp Fire survivor.

Rubiolo runs a donation center in Concow, just east of Paradise, and is in constant contact with fire victims who are still struggling to get back on their feet years later.

Before the Camp Fire five years ago, few people had experience with litigation, she said. Many signed contracts not fully understanding what they were giving up, including lawyers’ fees and other costs that would eat up more than a third of their compensation in some cases.

To Rubiolo, the promises made by outside law firms and their enlistees — which included famed environmental activist Erin Brockovich — looked a lot different than what's been delivered.

“People are already getting pennies on the dollar and then to have (so much of that) go into a lawyer’s pocket pisses me off,” she said.

But for local attorneys, the prospect of taking on a massive corporation like PG&E over a case as complicated as catastrophic wildfire is usually unfeasible, one Santa Rosa lawyer said.

“I wanted to take on PG&E myself, but the financial cost is massive and these cases tend to be pretty specialized,” attorney Roy Miller said.

Miller lost his own home to the Tubbs Fire and barely escaped alive with his wife and young children. He took on around 3,000 clients after the 2017 fires and the 2018 Camp Fire, he said, but teamed up with Watts Guerra to pursue the case.

“You need somebody who handles mass tort cases,” Miller said. Specifically, he said, a large firm like Watts Guerra has the financial resources to invest heavily in investigation and legal legwork without the guarantee of a court win.

Lessons from California

The hurricane force winds that pummeled Maui on Aug. 8 ahead of the flames downed power lines and snapped utility poles, and Hawaiian Electric has been criticized for failing to shut off electricity on its lines ahead of the storm.

Even though the cause is still under investigation, Watts and Singleton have both said they believe the utility is responsible for the fires.

“This fire was predictable, given the weather and fuel conditions,” Watts said in an emailed statement to The Press Democrat. “Hawaii(an) Electric documents reveal it knew its electricity grid on Maui was degraded after decades of neglect.”

UC Berkeley’s Jones noted that California has a unique standard for utility liability for wildfire losses in that plaintiffs must prove only that the power provider caused a blaze, whereas the bar is higher in other states where recklessness or negligence must be proven.

As PG&E’s liability for wildfire after wildfire in California stacked up, the company filed for bankruptcy in 2019, setting off a high-stakes legal struggle between shareholders, creditors, lawmakers and other powerful interests. The result was the Fire Victim Trust, established upon the utility’s exit from bankruptcy in 2020.

The $13.5 billion fund, half in cash and half in ailing PG&E stock, was meant to repay the losses of roughly 70,000 victims.

Fire victims had to vote to approve the deal, but many say they were led to believe they had little choice. Compared to investors, hedge funds and insurance companies, individuals who lost homes and loved ones to the flames say they got the short end of the stick.

To date, victims of the PG&E-caused fires covered by the trust have received 60% of what claim administrators have determined they’re owed for the loss of homes, properties, income and loved ones. Trust administrators have said that by the end of the year they seek to have notified all claimants what the trust determined they are owed for their losses. People involved in the case however say there’s little chance the payments will come close to 100% of claim values.

Like other attorneys, Watts urged the thousands of clients he had picked up after the PG&E fires to vote “yes” to support the deal that allowed PG&E to exit bankruptcy. Other attorneys, however, urged caution and even a “no” vote that could force the utility back to the negotiating table with a new offer.

“This is the only settlement option on the table. If it is rejected, a better deal is extremely unlikely and will only delay payments, if any, to survivors,” a Watts website warned in the run-up to the vote.

Some of the higher profile attorneys who worked on the PG&E case continue to say the Fire Victim Trust was the best outcome for victims of the California fires after the utility ducked into bankruptcy court.

Watts’ role in the deal was particularly scrutinized after news outlets reported his firm was partly funded by the same financial firms he was negotiating against in the bankruptcy. In response to inquiries at the time from Bay Area news outlet KQED, Watts denied a conflict of interest given the wide range of funding sources for his litigation efforts across the country but eventually sent written disclosures to clients.

“Everyone has to be wary of the game, and this game can only happen in the dark, so the big thing about all of this is transparency, transparency, transparency,” said Will Abrams, a Tubbs Fire victim and advocate in Santa Rosa who has frequently argued for stronger conflict checks and disclosures in the bankruptcy proceedings.

“Part of it is understanding that they're coming in to capitalize on these disasters and to make money. That should be the lens that folks are looking at here.”

In an email Monday, Watts said that because of his accumulated wildfire experience in California and elsewhere, he gets calls from lawyers asking him to investigate when such disasters break out, and that’s what happened on Maui.

He highlighted the importance of lawyers’ investigative efforts, which he said were crucial to securing damages for Tubbs Fire victims even though Cal Fire cleared the utility of responsibility.

“While we look at a lot of these disasters, we only pursue wildfire litigation when the facts demonstrate it was utility caused,” he added.

Watts said that the law firm’s continued advocacy with California’s Fire Victim Trust has resulted in more than a billion dollars in additional compensation earmarked for clients.

A long road ahead

Singleton, another big player and Watts ally in the PG&E bankruptcy, predicted that Hawaiian Electric will end up in bankruptcy court quickly if it’s found liable for the flames. The company does not have assets close to those PG&E had before its bankruptcy.

Bloomberg News on Monday put the total value of the Hawaiian utility shares at $3.5 billion. But the publicly traded utility’s stock has plummeted already as questions about its liability for the fires rise.

And in a quarterly filing with the Securities and Exchange Commission, Hawaiian Electric reported holding around $16.5 billion in assets while carrying more than $14.2 billion in debt and other liabilities, leaving just around $2.3 billion in cash.

“I would anticipate this is going to be a bankruptcy situation,” Singleton said, “I think there will probably be some similarities to what happened in the PG&E case.”

Singleton noted that federal bankruptcy law, which is designed to preserve a company and stabilize markets by ensuring debtors get paid, is not friendly to victims of corporate-caused disasters.

“When you have involuntary debtors like (utility-sparked wildfire victims) it is completely unfair,” he said. “It becomes a situation of how we can get the most favorable deal,” Singleton said.

The attorney, who has defended his support of the PG&E bankruptcy deal by saying it was the best option on the table, said he believes the Fire Victim Trust will ultimately pay people around 75%-80% of their total claims. “Which is fantastic in a bankruptcy, but it’s still unfair,” he said.

“It’s innocent victims, and they’re being victimized by the law.”

Singleton said his firm has established a presence on Maui and has several attorneys on the island. On Monday, he said he wasn’t sure exactly how many clients the firm had signed up, but said he believed it was in the neighborhood of “a couple dozen” with more signing up “all the time.”

On Monday, Singleton Schreiber filed a lawsuit on behalf of Lahaina Fire victims against Hawaiian Electric Industries, Hawai'i Electric Light Company and Maui Electric Company over the blazes. It is one of at least three lawsuits so far.

As one among thousands of California wildfire clients of Watts Guerra LLP, Eurotas-Steffy said she has often felt “like a pingpong ball kind of being hit back and forth between different people.”

For the first several months she worked with a helpful paralegal, but since then has been cycled through at least five or six people from Santa Rosa, Texas and elsewhere whenever she reaches out in search of answers or updates.

“I had to reexplain my story every time I had any reason to connect with them,” she said.

At one point, her mother’s payment was withheld in error, and it took more than a year and over a dozen calls and emails to resolve.

“That was super frustrating. I had to jump through so many hoops,” Eurotas-Steffy said. “I didn’t expect to be fighting tooth and nail to get my mom what she deserved, to get my mom what they told me she was getting.”

Watts insisted the firm’s staff of several hundred “answer every inquiry from our clients.”

For his part, Miller said he’s been in constant contact with fire clients over the past six years, advising people as they wait for compensation and navigate a legal process that has been frustrating to attorneys as well.

“People are hurting, and they need questions answered,” he said. “It takes time and not everybody is going to be satisfied, but all you can do is try.”

Ultimately, Eurotas-Steffy doesn’t regret the path she went down.

“I still have to do right by my mom. She lost absolutely everything except for the nightgown she was wearing. So, yeah, I would still do it again. But man, I would be smarter, and I would deal with it differently,” she said.

Her advice for Maui fire victims regarding big law firms?

“I assumed they were my advocate, but you have to be your own advocate.”

This story has been updated to clarify Fire Victim Trust administrators goals for the end of the year.

You can reach “In Your Corner” Columnist Marisa Endicott at 707-521-5470 or marisa.endicott@pressdemocrat.com. On Twitter @InYourCornerTPD and Facebook @InYourCornerTPD.

You can reach Staff Writer Andrew Graham at 707-526-8667 or andrew.graham@pressdemocrat.com. On Twitter @AndrewGraham88.